5.Demand for fasteners Aw.w. Grainger is 20,000 boxes per month. The holding cost at Grainger is 20% per year. Each order incurs a fixed cost of $400. The supplier offers an all unit discount pricing scheme with a price of $5per box for order under 30,000 and a price of $4.90for all orders of 30,000 or more. How many boxes should Grainger order per replenishment?"
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- X Ltd buys & uses a component for production at 10/piece Annual requirement is 2000 pieces. Carrying cost of inventary is 10% per annum & ordering cost is 40/order. The purchase manager proposes that a single order to be placed for the entire annual requirement. If X Ltd order 2000 piece at a time we get a 3% discount. Evaluate this proposal & make your recommendationCafe Celo uses 250 kg of sirloin steak for its meals, every month with an ordering cost of BD 15 and carrying cost of Bd 3, The manager insists on ordering 500 kg every order month. If this is the case, what is the price difference on the Total Cost if the shop will use the optimum quantity? a. BD 320.40 b. BD 319.50 c. BD 289.50 d. BD 322.80 e. None of the Above CLEAR MY CHOICEA material manager adopts the policy to place an order for a minimum quantity of 500 of a particular item in order to avail a discount of 10 percent. It was found from the company records that for last year 8 orders were placed each of size 200 Nos, ordering cost is ksh 500 per order. Inventory carrying charges at 40 per cent cost unit is ksh 400. (a) Show whether the purchase manager is justified in his decision (b) What is the effect of this decision on the company
- A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.20 per stone for quantities of 600 stones or more, $8.70 per stone for orders of 400 to 599 stones, and $10 per stone for lesser quantities. The jewelry firm operates 214 days per year. Usage rate is 25 stones per day, and ordering costs are $48. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Round your intermediate calculations and final answer to the nearest whole number.) Order quantity stones b. If annual carrying costs are 27 percent of unit cost, what is the optimal order size? (Round your intermediate calculations and final answer to the nearest whole number.) Optimal order size stones c. If lead time is 5 working days, at what point should the company reorder? Reorder quantity stonesB). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?Calculate total annual cost for the alternative suppliers for aproduct with following characteristics: montly demand; mean: 5000, standard deviation 2000 Holding cost: 30% Cycle service level: 98% Using EOQ formula, find the lot size. Don’t forget to add ordering cost to the total cost! Supplier 1 Supplier 2 Supplier 3 Ordering Cost(per order ) 1000 2000 5000 Cost 10 9 8 Average Lead Time ( month ) 0.5 2 2 Lead time std deviation ( month ) 0.5 1 2
- The mythical Own Distributors has an annual demand of 2,000 units for itshandheld security wands. The average cost of the handheld security wand isUS$140. Carrying cost is 18% of the unit cost of the security wand. Orderingcosts are US$30 per order. If the company orders in quantities of 500 or more,it can get a 6% discount on the unit cost of the security wand. Should the OwenDistributors take the quantity discount?An auto industry purchases spark plugs at the rate of Rs.25 per piece. The annual consumption of Spark plug is 18,000 numbers. If the ordering cost is Rs. 250 per order and carrying cost is 25% per annum. What would be the EOQ? If the supplier of spark plugs-offers a discount of 5% for order quantity of 3,000 numbers per order, do you accept the discount offer?A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.30 per stone for quantities of 600 stones or more, $9.40 per stone for orders of 400 to 599 stones, and $10 per stone for lesser quantities. The jewelry firm operates 175 days per year. Usage rate is 25 stones per day, and ordering costs are $48. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Round your intermediate calculations and final answer to the nearest whole number.) Order quantity _____________ stones b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Round your intermediate calculations and final answer to the nearest whole number.) Optimal order size ________ stones
- Q 1 Super K Beverage Company distributes a soft drink that has a constant annual demand rate of 4,600 cases. A 12-pack case of the soft drink costs Super K $2.25. Ordering costs are $20 per order, and inventory-holding costs are charged at 25 percent of the cost per unit. There are 250 working days per year, and the lead time is four days. Find the economic order quantity and total annual cost, and compute the reorder point. Q 2 Environmental considerations, material losses, and waste disposal can be included in the EOQ model to improve inventory management decisions. Assume that the annual demand for an industrial chemical is 1,200 lb, item cost is $5/lb, order cost is $40, inventory-holding cost rate (percent of item cost) is 18 percent. Q3 An insurance claims work area has five claims waiting for processing as follows. Job Processing Time Due Date (Di) 1 22 35 2…Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, themean lead time demand for bandage BX-5 was 60 (and wasnormally distributed). Furthermore, the standard deviationfor BX-5 was 7. Ms. Flynn would like to maintain a 90%service level. a) What safety stock level do you recommend for BX-5?b) What is the appropriate reorder point?(c) A company which produces washing machines has to store a certain item, and two such items are needed to assemble one washing machine. Annual demand for machines is 1000 units. The following information is available. Ordering cost = Rs.250 per order Inventory holding cost = Rs.125 per unit per year Back-order cost = Rs.150 per unit per year Find the following. i) Economic order quantity ii) Optimum level of shortage